Berkshire Hathaway

Berkshire Hathaway began as a textile manufacturing company in Rhode Island in 1839. It merged with Hathaway Manufacturing in 1955. By the early 1960s, the merged company was struggling — cheap foreign competition was destroying American textile manufacturing. This is where Warren Buffett enters the story.

Warren Buffett began buying Berkshire shares in 1962 as a value investment. In 1964, Berkshire's CEO offered to buy back Buffett's shares at $11.50. When the formal offer arrived, the price was $11.375 — 12.5 cents lower. Furious, Buffett bought enough shares to take control and fire the CEO. He later called it the worst financial decision of his life: instead of deploying that capital elsewhere, he was stuck with a dying textile business. The spite had cost him, by his own estimation, hundreds of billions of dollars in opportunity cost.

Buffett began using Berkshire's cash flows to acquire insurance companies, starting with National Indemnity in 1967 for $8.6 million. The key insight was "float" — insurance companies collect premiums before paying claims, giving them a pool of investable cash that costs nothing if claims are managed well. Berkshire's insurance float grew from millions to hundreds of billions, providing Buffett with an enormous, essentially free source of investment capital. The failing textile mill had become the world's greatest investment vehicle.

By late 2025, Berkshire Hathaway held a record $381.7 billion in cash — more than the GDP of most countries — as Buffett struggled to find acquisitions large enough to move the needle at Berkshire's scale. Charlie Munger, Buffett's intellectual partner of 60 years and the architect of Berkshire's investment philosophy, had died in November 2023 at age 99. In a surprising late-career move, Buffett disclosed a new $4.3 billion stake in Alphabet in Q3 2025 — a rare foray into big tech for a man famous for avoiding what he didn't understand.

Warren Buffett, 95, announced at Berkshire's May 2025 annual meeting that Greg Abel would become CEO by the end of the year. The handover took effect January 1, 2026, ending Buffett's 60-year tenure. In his farewell shareholder letter, Buffett wrote that he would be "going quiet" — communicating only through an annual Thanksgiving message. Class A shares of Berkshire Hathaway exceeded $800,000 each in 2025 — the highest-priced stock in U.S. history. Buffett remained chairman of the board. The man who had bought a textile mill in a fit of spite had turned $8.6 million in his first insurance acquisition into one of the largest companies on earth.